US looking to impose tougher restrictions on AI chips exports to China: Report

The Biden administration is reportedly mulling imposing tougher sanctions on exports of artificial intelligence (AI) chips to China, amidst concerns that Beijing could use AI chips for weapon development and hacking.

According to the Wall Street Journal (WSJ) newspaper, the US commerce department is looking to update existing export controls that were introduced October last year.

If implemented, it would make it harder for companies such as Nvidia and Advanced Micro Devices and AMD to sell advanced chips to China, the WSJ reported citing three people familiar with the situation.

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Though no timeframe was provided, it is believed that the commerce department could move as soon as early next month to stop the shipments of chips to China and other countries of concern without first obtaining a license, the report said.

It comes at a time when US and China are fighting hard to develop AI-accelerated hardware and acquire patents to protect innovations.

It will also hinder Nvidia’s business as it had designed new graphics processing unit chips called the A800 and H800 for China to replace more advanced chips that were restricted under the export rules.

The company also tweaked its flagship H100 chip early this year to comply with regulations.The new rules would even ban the sale of A800 chips without a license, the report added.

Following the report, shares of Nvidia fell more than 2 per cent, while Advanced Micro Devices (AMD) fell about 1.5 per cent.

US chipmaker Nvidia reaches $1 trillion milestone

Big blow to Nvidia

Speaking recently to the Financial Times, Nvidia chief executive Jensen Huang said the export controls could may pose “enormous damage” to the US tech industry.

He said the decision left his company with its “hands tied behind our back” by preventing them from selling its most advanced chips to China.

Though the A800 and H800 are considered inferior, China’s buzzing tech giants are heavily reliant on these chips for their AI research and development.

Tencent, Alibaba, Baidu, ByteDance and other Chinese groups had placed additional orders for Nvidia chips when the AI race took off in China this year, FT reported citing sources.

Modern AI chips

Nvidia is the main supplier of chips for building and updatingAI systems. One of its recent products, the H100 GPU, has 80 billiontransistors. That is reportedly about 13 million more than Apple’s latest topprocessorused in its MacBook Pro computers. However, this technology is costly. One online seller lists the H100 for $30,000.

Nvidia does not make these GPU chips itself. It has contracts with manufacturers like Taiwan Semiconductor Manufacturing and South Korea’s Samsung Electronics.

Some of the biggest buyers for AI chips are cloud-computing services. Technology companies, like Amazon and Microsoft, use these chips for cloud computing.

(With inputs from agencies)

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